Rumours that BSkyB may make a bid to buy TalkTalk
Thursday 05 July 2012 12:55:25 by Andrew Ferguson

The retail prices for broadband amongst the six largest providers mean that volume and bundles are the key to profitability, and the rumours flying around the financial sector is that BSKyB may be considering a purchase of TalkTalk to make it the largest broadband retailer in the UK.

TalkTalk has around 4.07m customers, and Sky has 3.86m as of March 2012 and if Sky was to continue its current rate of growth is due to overtake TalkTalk as the second largest xDSL provider in the UK once the latest quarters results are announced, and get very close to exceeding the number of cable broadband customers Virgin Media has. A merger of Sky and TalkTalk would create a massive provider with over eight million customers, making them it the largest broadband provider in the UK, beating BT by over 2 million customers.

The UK broadband market has hundreds of providers selling services to consumers and business, the various mergers of the last five years have seen over 90% of the market concentrated in just a handful of providers, a merger between two of the largest ones could result in less retail competition. Though by merging into a single body, its ability to dictate terms to Openreach could drive the market forward, though while TalkTalk and Sky have fibre products, they are as yet not pushing the services heavily to consumers in the same way BT Retail is.